Week In Politics: Tax Cuts

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Guest host David Greene talks with Reihan Salam, a conservative blogger at National Review Online and policy adviser at Economics 21, and Karen Finney, a liberal commentator on MSNBC. They discuss the political news of the week, including the Republican Party's "Pledge to America" and the fissures in the Democratic Party on extending tax breaks.

DAVID GREENE, host:

Those tax cuts and also the Republicans' latest effort to articulate their vision for the country are the topics of our political roundtable today. Our regular commentators, E.J. Dionne and David Brooks, have a much deserved day off. And today, we're going to talk with Reihan Salam, who blogs for the National Review and is joining us from New York. Welcome to the program.

Mr. REIHAN SALAM (Blogger, National Review Online): Thanks for having me.

GREENE: And here in the studio, we're joined by political consultant Karen Finney. She used to work for the Democratic National Committee. Welcome, Karen.

Ms. KAREN FINNEY (Political Consultant): Good to be with you.

GREENE: So let's start with these tax cuts. We just heard at the top of that piece that Speaker Pelosi is making it sound still iffy about whether tax cuts will get a vote before the November elections, and the Senate has basically said no way. And, as we heard, that's creating a lot of uncertainty for businesses, but what about the political uncertainty? And, Karen, let me start with you. What's the calculation for Democrats about whether to get a vote and get on record on this before the election?

Ms. FINNEY: You know, it's interesting there's actually a lot of division, obviously, within the Democratic Caucus about this. Because on the one hand, the political calculation is that for some of those blue dog Democrats or Democrats who are running in more conservative districts, they're afraid of being accused of raising taxes.

Other Democrats recognize the opportunity, frankly, to get the Republicans on record as having voted against the middle class. So it depends on, you know, where you're running in terms of how you view this politically.

Broadly, I would say, though, in the progressive community, there's a lot of disappointment, and I think it makes the Democrats look weak overall, that they'd sort of lost the message on this because they had a pretty strong message coming out of President Obama's speech about the contrast between tax cuts for millionaires versus the middle class.

GREENE: So does Nancy Pelosi have people sort of banging down her door, coming in closed doors, trying to make the argument on both sides whether to have this vote?

Ms. FINNEY: Well, she does. And here's the other thing. Given that the Senate indicated yesterday that there was no way they were going to do it, it sort of - I think it bolstered the argument of those who went to Pelosi and said, look, there's no point in us taking this risk and doing this because nothing is going to happen in the Senate. So there's no way anything can happen before the elections.

GREENE: Reihan, let me bring you in here. Do Republicans, politically speaking, want to have a vote on this soon?

Mr. SALAM: I think it would make sense for them because, as Karen suggested, there are 31 House Democrats who embrace the Republican position, and I think they recognize that this is a real fracture within the Democratic coalition that they could use to demonstrate that there is a broad consensus that we should extend all of the Bush tax cuts or rather the 2001-2003 tax cuts at least for the next two years. That's a position that's even been endorsed by the president's former budget director, Peter Orszag, as a tentative step towards eventually having a real comprehensive tax reform proposal, say, two or three years down the road.

Because the truth is about this uncertainty, it's not clear that the country can afford the $3 trillion in middle class tax cuts, let alone the entire package. But during the next two or three years, because the economy is in such dismal shape, the budgetary cost will be somewhat lower.

GREENE: And we should say the cost of those tax cuts for everyone but the wealthy would be $3 trillion over the next 10 years.

Mr. SALAM: That's exactly right.

GREENE: Karen, you look like you want to jump in here.

Ms. FINNEY: Well, just a couple of things. I think this argument regarding uncertainty is a little bit silly. I mean...

Mr. SALAM: I agree. I actually agree.

GREENE: We have agreement.

(Soundbite of laughter)

Ms. FINNEY: Hey. The business community, you know, has been using that argument, and, again, I think there is as much uncertainty as saying the tax cuts are going to expire at the end of this year and saying that they would expire in two more years. So I think, frankly, Democrats had an opportunity to take that argument off the table and, again, really position this as a choice between tax cuts for millionaires or the middle class. And, unfortunately, they decided to go the safe route.

Mr. SALAM: I got to say, I don't agree entirely with that because I think the problem is that both Republicans and Democrats embrace unaffordable tax cuts. Those $3 trillion worth of tax cuts, not the 700 billion for the rich, but the three trillion are a real budgetary hole that has to be addressed, and that's the real uncertainty that both parties are going along with.

GREENE: Let me just ask you about another topic, Reihan, and that's the "Pledge to America," sort of a blueprint for what Republicans will be pushing on the campaign trial. In Congress, it includes putting the brakes on a lot of legislation Democrats have championed - the economic stimulus, health care, financial regulatory reform. There seem to be a lot of conservatives not so happy about this. Is there a fracture in the Republican Party?

Mr. SALAM: That's true. There are a lot of conservative activists who feel like the pledge doesn't go far enough. There are some who believe that it's too specific. There are others who believe that it doesn't go far enough in describing the exact entitlement and spending reforms that the Republican Party wants to advance. So I think that the truth is the criticisms are all over the map.

GREENE: And, real briefly, Karen, is this an opportunity for Democrats? I mean, if Republicans can't sort of get along on this?

Ms. FINNEY: Absolutely. I mean, it should put some of the Tea Party candidates, in particular, in a tough spot because, again, there are things that are proposed here that would increase the deficit and aren't paid for. That's something they've been campaigning against.

GREENE: Now, we did have some levity on Capitol Hill today. The comedian Stephen Colbert testified in front of a House immigration panel. He was mostly in character as the conservative talk show host that he spoofs on "The Colbert Report." I'd like for both of you to stay along with me and listen to this piece that we have from our correspondent David Welna who got to cover that very unusual testimony.

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